There are many blockchain systems out there, and almost all of them are customized, known for their specific consensus algorithms, the tasks that they can complete, and ways they can help out the community. With all these amazing blockchain systems already in the works, it can become a bit complicated and confusing too to select a potential blockchain environment that can effectively cover your needs and business preferences.
With that being said, there has been a continued problem within the crypto community that users and developers have been facing for a very long time, and that is the lack of scalability. Centralized banking systems might lack the security of the decentralized world and the prospect of blockchain technology, but there is one thing that these systems have in plenty, and that is the option to scale their infrastructure whenever they want to.
Sadly to achieve scalability in the decentralized world, all sorts of tricks and hula hoops must be interacted with, and even then, you can never be sure if your decentralized system can become scalable enough to accommodate the growing size of the customers and users who are looking to submit their request regarding a particular transaction or not. If you happen to be on the same boat and are worried about the scalability and interoperability aspects of your present blockchain partner, then maybe you should be looking towards other options and exploring other similar elements out there in the crypto market. One such decentralized system is the Harmony network.
Introduction to Harmony Blockchain
Harmony is a layer one blockchain environment that, with the help of sharding and proof of stake, is able to achieve scalability like no other blockchain media out there can, and not only this, the system is completely interoperable, which means that you, as a potential user won’t have any problem interacting with other blockchain systems out there already in the works. It doesn’t simply use the proof of stake consensus but uses the effective proof of stake system, which doubles the security of the whole enterprise while not stepping on the decentralization aspects of the deal but solving the scalability-oriented issues as well.
Not only this, but the Harmony blockchain system has also initiated a long sought-after feature within the crypto community by the name of the cross-chain financial model. This feature was hard to come by earlier, and only a handful of decentralized elements out there had support for it, but now Harmony has taken it under its own umbrella.
Other than that, the blockchain system also offers bridging services that exist between the BNB, Ether, Bitcoin, and various other networks out there. The entire model of scaling of Harmony is dependent on the Web3 security along with zero-knowledge proofs and the imitation of the decentralized autonomous organizations when it comes to dealing with various problems of the crypto market.
Harmony as Sharding-Based Blockchain
You must be thinking about how a single blockchain entity is able to provide the world with scalability, interoperability, decentralization as well as unbeatable security to each and every transaction out there. Is it for real? Yes, thanks to the sharding technology, Harmony network is able to keep all thee promises and more.
Sharding is all about bringing the overall resources present for a task into use and splitting them into parts or pairs so that the overall work can be completed in a much more efficient way. Harmony blockchain splits all the present resources of the entire network structure into four different sections, and all of these are to work in parallel to each other, which gives rise to efficiency hence taking care of the scalability needs of the network.
Users can choose from these available shards, which will help them to distribute the overall workload that the network has to tackle or go by in a given time period. Each shard in itself is responsible for one core function that the network provides such as one shard will be dealing with only the validation of the transactions, another one will be in charge of the block creation, another will deal with transactions, and the last one will take care of the staking.
Hence, no one shard is burdened with all the heavy lifting, and each and every one of these works in Harmony to carry the overall load of the network in an incredibly efficient and comprehensible way. Following are some of the lesser-known benefits of the sharding technology in itself that the Harmony blockchain has emphasized greatly on;
There is no need for a validator to carry or maintain a full copy of the entire transaction history of the blockchain in question because of the sharding. As each shard is responsible for one core aspect of the network’s features and services, only the selected shard for the transaction-oriented aspects has to deal with the record-keeping and maintaining of the transaction history of the network in question.
All the validators for the network would have to pass a screening phase to be appointed as the validators. And even so, these validators are assigned to the shards completely randomly without any particular pattern in question. This is to dishearten and weaken the hostility and taking over as is witnessed on various other blockchain systems out there. After each and every Epoch, the validators will be transferred to a new possible shard, and the whole process shall continue in the same fashion.
At present, there is a limit of about 250 validators per shard, and it is known as the BLS keys. But in case the present load of the system is rising, and there are many new users that need to be accommodated properly, then the number of shards along with the validators can increase to meet this workload. It doesn’t matter what specific type of shard is appointed to a random user for the sake of transaction validation; the required time to complete the validation process and subject the transaction into a block will not be more than two seconds at the very top.
Shard 0 is known as the beacon chain, and it works as an information relay between other shards out there; presently, most of the network’s activity also takes place on this very chain. Cross-shard implementation is a concept that is in the works at the moment and is not fully implemented, but in the future, it might have some incredible real-world use cases. This will solve the problem of effective communication by relaying messages directly to the nodes out there, cutting out the middle services altogether for better reach and efficient communication taking place between various nodes of the network.
Effective Proof of Stake
The effective proof of stake is in part similar to the proof of stake consensus algorithm that is extremely popular among a variety of crypto exchanges out there; it is just like staking your tokens for the sake of becoming a validator and earning handsome rewards for each transaction that you validate and conform to a block over the blockchain media.
The more tokens you delegate or stake over the blockchain, the more handsome would be your chance to become a validator for the blockchain system in question. Every blockchain system has its own rules and principles that you have to abide by; sometimes, you only have to stake a single token for the sake of becoming a validator, as is the case with Harmony, whereas some crypto environments would recommend that you stake as much as you can to increase your chances of becoming a validator in real-time.
ONE is the native token of the Harmony blockchain system, and each and every validator who wishes to become one would have to delegate a single token, and then the system would scan the whole thing and decide if the person in question is ready to become a validator yet or not. If you become a validator, then you would be tasked with the validation of multiple transactions until you either quit your position or the system deems it fit to do so on your behalf.
Remember that when you are a validator, you will not only be earning block rewards but also transaction fees for the sake of validating each and every transaction. You can become a delegator by staking your native Harmony token over the blockchain system, but if you don’t wish to become a validator, then you can assign a specific user to your delegation who would be performing the process of validation on your behalf. This way, you would be earning rewards but would have to split the reward with the validator as well because you already have asked them to validate the transactions on your behalf.
The reward distribution system for the Harmony blockchain is extremely different and unique; this is the very thing that separates the Harmony blockchain from various other similar systems out there. Most blockchain systems have this simple process set into place; it requires you to stake as many tokens as you possibly can, which will ultimately increase your chances of becoming a validator and getting your hands on all those rewards which you will be earning after the completion of transactions and their subjection into the particular blocks. The harmony blockchain system is completely against this power-grabbing scenario that multiple other blockchain systems have developed.
You can stake a number of leading Harmony tokens into a single node, but if you overpopulate it for the sake of getting your hands on the reward which will be awarded to you for completing all those transactions. But do a bad job at validating those transactions?
Then you would likely be penalized by the system and would no longer be able to become a validator ever again. Those nodes which contain a small number of stakes are probably going to receive more favourable rewards, which would incentivize large validators to decentralize. This system also takes care of any potential failures that are bound to happen if the whole process of validation was to become a victim of unethical use of power and staking, thus avoiding multiple single points of failure within the system.
Other than validating transactions and providing an extremely secure method to do so, the Harmony blockchain also favours low gas fees to the users. It means that you would likely have to pay only a small number of a fee to get your transaction validated, and that is an extremely lucrative approach in contrast to Ether, which assigns higher gas fees, especially in the times of a greater flux of users wanting to validate their transactions thus saturating the network.
What is ONE Token?
You might have worked with multiple cryptocurrencies out there and blockchain mediums serving multiple areas of interest for developers, crypto users, or people who are simply interested in the idea of non-fungible tokens and decentralized apps above all else. You might have noticed one chilling detail about every blockchain media out there that is completely similar no matter what, and that is the fact that each and every blockchain out there has its own token or cryptocurrency, which is used and recognized not only by the blockchain to whom it originally belongs to but every other crypto domain out there.
This is known as the primary token of the blockchain in question; as for Harmony blockchain, it has one coin, which is the native token of the blockchain. It can act as both a utility token as well as a governance token which means that you can use one coin for the sake of paying for network transaction fees or buying products or services over the blockchain media, as well as staking the token for the sake of becoming a delegator or validator to earn handsome rewards in return for the service you provide in validating the transaction and confirming the data after thorough validation into particular blocks over the blockchain system.
Not only this, but the ONE coin can also be used as a governance token which means that if you stake multiple tokens at once, then you will be entitled to take part in governance-related decisions for the entire blockchain system; you might be asked to cast your vote about certain matters of the blockchain such as deciding which new cryptocurrencies should be listed over the blocking system, what specific guidelines should be edited for community and or what kind of new initiatives should the blockchain work towards. These are just some of the things that can be done with the ONE token, which is the native token of the Harmony blockchain.
Now, you might be wondering about staking and if it is worth your time. At the end of the day, it all comes down to what kind of specific figures we have in mind when we think about return on investment. Do you want to become a millionaire off of this only one blockchain system, or do you want to have a consistent stream of revenue instead? Only when you answer these questions first and quite honestly would you be able to prepare a solid system to stake your own tokens for a particular blockchain media.
All you have to do is to find a crypto exchange that will be at home accommodating your request about the purchase of the native token. You would have to search multiple crypto exchanges out there to know and gather information if the said token is indeed listed on their options or not. Only when you find a crypto exchange that is providing you access to ONE token can you purchase it and then stake it once you have allocated the tokens into your personal wallet and linked the wallet with the Harmony network.
The process might sound a bit complicated on the paper, but in reality, it is smooth as butter. You can use your debit or credit card for the sake of paying for the tokens that you are willing to purchase, and once purchased, these tokens to be shifted into any potential wallet in the world, even if you are not making the purchase for yourself you can send these tokens to the original owner of these and be done with it.
The process of staking is extremely simple; you need to head over to this staking explorer on the Harmony network and then choose a validator out of the list of multiple validators present to use your tokens for the sake of validating transactions and splitting the rewards with you, the delegator.
Now that you have chosen a validator, you need to assign or delegate your tokens to them by clicking the delegate button on their profile. For the sake of retrieving your piece of the reward, you can either create a new wallet and assign the address of the wallet to the profile of the validator or you can create a custom wallet within the Harmony network. After the whole process is done and the validator is validating transactions and earning rewards, you would be receiving your end of the deal within your crypto wallet that you have provided to the network in the first place, as simple as that.